On Monday (December 23), after two consecutive days of gains, the AUD is currently stabilizing, and the US dollar briefly weakened after the release of core PCE data.

The lower inflation data in November in the United States has strengthened market expectations that the Federal Reserve will continue its loose policy in 2025. However, according to the CME FedWatch tool, the market currently predicts that the probability of the Federal Reserve keeping interest rates unchanged in January next year exceeds 90%, maintaining the current range of 4.25% -4.50%.

The market expects the Reserve Bank of Australia to start lowering cash rates in February next year (as signs of economic slowdown are becoming increasingly apparent). Traders are preparing for the release of the minutes of the Reserve Bank of Australia meeting, after keeping interest rates unchanged at 4.35% for the ninth consecutive meeting.

The resilience of the US economy is evident, and Australia's monetary policy is conservative

The US economic data has shown strong performance. The annualized growth rate of gross domestic product (GDP) in the third quarter reached 3.1%, higher than market expectations and the previous 2.8%. Meanwhile, in the week ending December 13th, the number of initial jobless claims in the United States dropped to 220000, lower than the previous week's 242000 and market expectations of 230000. These data indicate that the resilience of the US economy is still relatively high.

However, inflationary pressures are gradually weakening. As the preferred inflation indicator of the Federal Reserve, core personal consumption expenditure (PCE) increased by 2.8% year-on-year, slightly lower than the market expectation of 2.9%; The monthly growth rate is only 0.1%, lower than the previous 0.3% and the expected 0.2%. This further enhances the market's expectation that the Federal Reserve will continue its loose monetary policy in 2025.

Australia's economic data also shows some positive signals. In November, private sector credit increased by 0.5% monthly, in line with market expectations. Although it was lower than October's 0.6% (the highest growth rate in four months at the time), on an annual basis, the credit growth rate slightly increased from 6.1% in October to 6.2%, the highest level since May 2023. This demonstrates the relative stability of the Australian credit market.

Nevertheless, Australia's monetary policy remains conservative, with the Reserve Bank of Australia keeping interest rates unchanged at 4.35% for the ninth consecutive meeting. The National Australia Bank (NAB) predicts that the first interest rate cut may be in May 2025, but does not rule out the possibility of a rate cut in February next year. The NAB report shows that the unemployment rate is expected to decrease from a peak of 4.3% to 4.2% after the economy stabilizes in 2026. In terms of inflation, the core inflation for the fourth quarter is expected to increase by 0.6% quarter on quarter and will fall back to 2.7% by the end of 2025.

In terms of technology, analyst Faruqui provided the following interpretation:

On Monday, December 23rd, the current AUD/USD trading price was approximately 0.6250. According to the daily chart analysis, the exchange rate is still in a downward channel, showing a sustained bearish trend. However, a relative strength index (RSI) above 30 on the 14th suggests a possible upward correction in the short term;

Downward support: AUDUSD may test the lower limit of the downward channel, with support around 0.6120;

Upward resistance: The initial resistance is at 0.6303, followed by 0.6337. The stronger resistance is located at the upper limit of the descending channel, approximately 0.6380. If the exchange rate breaks through this channel, it may rise to a nine week high of 0.6687.